Mostly I have no problem just donating most of the gifts we get, and I don't feel the slightest twinge about it. My only problem is that my sister lives nearby, and she tends to hang on to gifts that she gives. She wants to come to my house and see [gift x] prominently displayed or in use. If she doesn't see it, she'll ask, e.g., "Where's that cute stuffed moose I gave Sprogly?" If I explain that Sprogly's not that into stuffed animals, except for his favorite stuffed dog, she's miffed. She goes on lots of teacher conference trips, and always brings back junk--useless plastic gadgets for the kitchen, cheap plastic toys--and says as she's giving them, "Oh, this is a silly stupid gift. I don't know why I got it. Ha ha ha." Then the next time she comes to the house, she asks about it. It drives me crazy, and I've told her so.
I mean, we're pretty close. We've had whole conversations about how I'm trying to simplify, and get rid of all the plastic stuff in my kitchen, etc. Whole conversations about how much stuff I'm purging. She came over before my recent move, and looked into a box of stuff for Goodwill. She saw a plastic pasta server thing with a handle like Mickey Mouse in there, that she'd brought back from Disney Land (or World, whatever), and she said something snippy about it. I've told her, if you give me a gift, once it comes in my house, it's mine to do what I like with it. If I want it gone, it's gone.
At Christmas, before coming home from my parents', I packed all the gifts separately: keep, return, donate. The ones in the 'donate' bag didn't even come into the house. Mind you, I've been very up front about not wanting battery-operated plastic toys for Sprogly, so everyone's had fair warning. It's a shameful waste, but I don't want the stuff.
I just moved into a place that's about 100 square feet smaller, with no garage. I'm going to have to be even more ruthless in getting rid of the stuff I already have, never mind the stuff we're given.